Accuracy is key. As the North Bay’s busy real estate season ramps up, a new law is tightening how homes can be portrayed in listings.
California Assembly Bill 723, which went into effect in January, requires photographs that are digitally altered through artificial intelligence to include statements indicating the changes. The language of the bill applies to photos in which elements are added or removed to improve a property’s appearance in all promotional materials.
Under truth-in-advertising laws, “real estate licensees may not publish, advertise, distribute or circulate any material or information that is false, deceptive or misleading.”
“It’s fairly commonplace to replace the sky with a blue sky. It’s also a common experience to edit out the uncle’s car in the way that no one can find the keys to,” said photographer Daniel Wilson, whose Santa Rosa company, Photovino, provides visuals for the North Bay real estate community.
“We think these are good guidelines. There’s always an ethics boundary of what we can remove,” he said.
There is some leeway, as long as the image remains realistic. A photo shoot doesn’t have to involve actually starting a fire in the fireplace when AI may be used to produce flames. However, the fireplace in the house had better work. Otherwise, the photo would deceive wannabe buyers.
Under the guise of what not to do, adding a sunset to an east-facing window on a photo wouldn’t meet the standards of good business practices — with or without a disclaimer — because it’s impossible to achieve.
“AB 723 explicitly contains an exemption for common photo editing adjustments that do not change the representation of the real property,” said California Assemblywoman Gail Pellerin, D-Santa Cruz, who introduced the bill. “Additionally, any photo editing is allowed as long as it is labeled, and the original photos are made available to the consumer. If the listing agent would like to turn the walls, floors, fixtures and furniture bright pink, there is nothing prohibiting them from doing so as long as they disclose.”
In this scenario, walls could be repainted, and furniture and fixtures are available in many colors.
The regulations exclude images where only lighting, sharpening, angling, color corrections, straightening and cropping are made.
The law comes with no fines or penalties. However, the California Department of Real Estate may address violations.
Sonoma County Realtors said they’re already on board with the practice, having primarily complied, before the bill was signed by Gov. Gavin Newsom last October was enacted.
Compass Healdsburg Realtor Carol Lexa said the Multiple Listing Service (MLS) has already been proactive, creating a seal to notify prospective buyers of changes made.
“All brokers want to be compliant and reputable,” Lexa said.
“What we have to do with the listing photo is either say [it was altered] or to show a picture with and without [the addition],” said Santa Rosa’s Cristie Marcus of Coldwell Banker.
Marcus said it makes sense that the listing agent and seller would not want to anger a prospective buyer with higher expectations based on a photo.
“If they get to the house, and there are no remarks said, they’ll get a sour taste,” she said.
Sotheby’s Sonoma Realtor Erin George agreed.
“You never want people to be disappointed when they arrive at the house,” she said.
Nonetheless, George refrains from using images that include electrical wires because they junk up the property, making the curb appeal harder to come by.
“We’ve been virtually staging for a while now, [and] we type in ‘virtually staged’ now,” she said.
AB 723 represents yet another way California lawmakers are attempting to manage the surging presence of AI in different industries.
Staging of home listings has long been a part of the real estate industry, but its increasing popularity as access to photo-editing software has increased to “digital” or “virtual” versions.
In-person home staging companies have watched the trend unfold.
Christine Hung, who owns White Harmony Design and Staging in San Francisco, isn’t ready to say goodbye to her in-person service. Hung insisted she’s seen no decrease in her business resulting from the popularity of digital staging.
“Not at all — because people still pay for the staging service,” she said, singling out high-end clients that tend to pay for more extensive physical staging improvements.
Her clientele includes sellers with homes ranging from $2 million to $10 million. While also a professional interior designer, Hung charges from $5,000 to $15,000 for these services.
Real estate market snapshot
As the real estate industry starts to accelerate, heading into its most active season, the North Bay remains a seller’s market.
According to the latest Compass data released this month, Sonoma County has found itself with continuing its rising demand and inadequate supply. Homes are selling fast, and over-asking offers dominate the scene.
In other words, the region represents a strong real estate climate.
“And they’ve been waiting for interest rates to come down,” Compass Healdsburg Realtor Carol Lexa said, referring to prospective buyers watching rates hovering around 6% “go up and down.”
With uncertain times such as a war in the Middle East, she recommends house hunters: “Seize the day.”
The wild card in coming months is what sustained effects, if any, the Iran War may have on rates as well as inflation, the volatility of financial markets and consumer confidence. The cost of living, ranging from gas to groceries, is tied to the latter. Then, the labor market — which experienced a 92,000 drop in jobs in February — showed companies reacting to conditions.
Sonoma County
- Median sales price: $838,000
- Top median sale prices by area:
- Kenwood: $1.8M
- Sea Ranch: $1.4M
- Bodega Bay: $1.4M
- Sebastopol: $1.2M
- Healdsburg: $1.1M
- Santa Rosa (northeast): $889,500
- Oakmont (Sonoma Valley): $730,000
- Santa Rosa (northwest): $710,000
- Santa Rosa (southwest): $682,500
- New listings (2025): 5,330 (up 9% year over year)
- Price reductions (2025): 140 (down 16% year over year)
- Population: 485,375
Napa County
- Median sales price: $945,000
- Top median sale prices by area:
- St. Helena: $1.9M
- Calistoga: $1.3M
- Yountville: $1.3M
- Napa: $935,000
- Pope Valley: $401,000
Source: Compass, March 2026
